Before up became down and up again as the landscape shifted societally, culturally and economically at a rush rate as COVID-19 bust through the gates, South African eCommerce had anticipated a year on year growth. The value at that time sitting with apparel, media products and consumer electronics, with pureplay Etailers such as TakeAlot, Superbalist and OneDayOnly dominating the market.
“And then suddenly, groceries became the new focus as a necessity due to lockdown trading rules. We have seen over this time, FMCG growth anywhere between 6 to 10 times over the previous year’s trading. With the current trajectory, we expect eCommerce to be closer to 2% of retail by the end of this year, as opposed to 1,4% back in 2019. Beyond the pureplay Etailers, there has been a demand for ‘Brick & Click’ and ‘contactless delivery’, which has seen exponential growth on platforms like Checkers, Clicks Online and Sixty60 and on demand platforms like Zulzi and OneCart benefitting greatly,” Justin Dennis, Global eCommerce Executive, Smollan.
Up and Over
All businesses now face unprecedented challenges. In the commerce sector with omnichannel opportunities, those challenges are twinned with opportunity. The commerce evolution with its accelerated pace has given rise to a range of new competitive requirements, and consumer behavioural shifts from the initial panic buying space to a more mindful approach to commerce, with eCommerce brands in particular shining brightly.
Nielsen, when looking into scenarios beyond the pandemic identified three-time horizons for market regeneration. Rebound was the early return to normal living conditions (schools, restaurants etc. re-open), followed by Reboot, a medium-term scenario that is positioned in Q4 of this year. And then a longer-term view of Reinvent, which is a return to normal living conditions at some point in the first half of 2021 as the world fundamentally recalibrates.
In a recent Winning Strategy Report by Ascential Edge, key recommendations from a tactical as well as strategic perspective were offered, around stores of the future, shopper engagement and retention, supply chain and fulfilment and ecommerce and digital ecosystem management.
The store of the future in line with the rise in eCommerce, and the increased cost of competing all putting pressure on store-based retailer profitability, the industry must develop a direction for physical store networks to drive traffic and sales. With consumer sentiment still hedging on the side of caution in terms of in-store purchasing, retailers, brands and business owners need to make sure the online explosion is not at the expense of the in-store experience.
As chain retail continues to take a share from traditional retail and channel blurring intensifies, retailers will need to find ways to drive shopper engagement around return trips and foster loyalty with so much choice at hand.
Retailers need to meet shopper expectations by offering options that fit into their busy lifestyles. As investment in eCommerce and fulfilment take their toll on profit margins, efficient and cost-effective supply chains will become even more important.
With the expected growth in eCommerce, it is crucial for retailers to develop sound platforms and operate successful digital ecosystems to drive sales. Brands now more than ever are advised to offer personalisation opportunities to customers on their digital platforms. The D2C trend, growing exponentially around the globe and taking a foothold in South Africa, is where brands can truly manage their brand experience and offer something beyond what a marketplace can. In so doing, offering more than just a digital transaction and introducing the option to play with personalisation, subscriptions and more within their own portfolio.
“Physical retail will remain the largest part of retail for the foreseeable future. However, if global markets and COVID-19 has taught us anything, eCommerce has a massive part to play, and an ever-increasing role in the future. We do not believe in neglecting either, but rather ensuring that both are driven adequately. eCommerce will see increased growth and will grow its share of retail. The key is to already have learnt the lessons and driven the business online whilst it is still in its infancy. Otherwise brands may be playing catch up down the line,” Justin Dennis, Global eCommerce Executive, Smollan.